Sunday, May 23, 2010

Can't Pay £1 Trillion, Won't Pay £1 Trillion!

At the time of writing, the UK national debt was estimated to be £914,930,818,716. Okay, that sounds really scary, but what does it actually mean? Well, it means that the government owed nearly a trillion pounds to its lenders. When you're used to dealing with hundreds and thousands, a number like that is mind-boggling, and seems impossible to understand. But when you divide it by the total population, it comes to nearly £15,000 for every man, woman and child, or nearly £32,000 for every person in paid work.

A government can't allow a situation like that to go on; it's poison for the economy. The new Conservative/Liberal Democrat coalition pledge to cut much of this deficit over the next five year Parliament, as indeed Labour promised before their defeat. But even if they wanted to, our rulers couldn't simply wave a magic wand and make the debt disappear. The money has to come from somewhere, so there are three options.

One: raise taxes to an astronomical level. Two: make enormous slashing cuts to government spending. Three: some combination of the two.

The United Kingdom went into this crisis as the second most unequal of the world's most prosperous ten nations, behind the United States. A February report by the National Equality Panel found that the richest 10% of the population were one hundred times wealthier than the poorest 10%. Poverty rates were the highest in Western Europe, while the richest one thousand individuals were worth more than three times what they were in 1997, when New Labour came to power under Tony Blair.

Much of the debate during the election campaign was focused on how the next government would make an initial £6 billion cut to spending. But in a country where those richest one thousand have a combined fortune of £333.5 billion, it might be argued that a 'fair' solution would be to grab the money from those kinds of people. After all, they wouldn't really miss it, and those of us who struggle to make ends meet wouldn't have to suffer job losses, cuts to the services we rely on, or 2.5p in the pound on our weekly shop. What's more, that privileged layer of society doesn't actually create any wealth, they just consume it, or gamble with it if they are the investment bankers who triggered the 2008-09 crash. Much of the government's debt comes from Labour's banker bailouts! So surely any 'neutral' government would take up Robin Hood politics right now, if they wanted to govern in the interests of the majority.

Unfortunately for us, there's no such thing as a 'fair' and 'neutral' government. There never has been, and there never could be. For centuries, governments on these islands openly and proudly ruled on behalf of the aristocracy, who claimed the 'divine right' to live in luxury and dictate the laws. After the Civil War, Parliament became more powerful, so owners of land and eventually factories argued about what was in the 'national interest'. Then the struggles of the Chartists, labour unions and suffragettes helped win more and more people the right to choose who sat in Parliament. People from working class backgrounds were soon elected, and they were usually members of the Labour Party.

But even those who genuinely wanted to change the system from within found that the system changed them far more. Suddenly they were rubbing shoulders with the elite, and they found they had different interests to the folks back home. Besides, there was an economy to run. Economies run on profit, and profit comes from making people work harder, for less reward. If politicians in this country couldn't do that, they'd fall behind their rivals all around the world. Sure, they made big changes in the 1940s, when Britain had an empire, and could afford it. But even then, things like a National Health Service and a comprehensive welfare state were largely concessions granted to protect the rich from returning soldiers, who had lived through the Great Depression and Second World War.

So if the debt burden isn't going to be shared 'fairly', what will happen over the next few years? We can predict that the coalition will try to claw the national debt from the backs of those who can least afford it. That's certainly what's happening in Greece, where their equivalent of the British Labour Party wants to wring €30 billion from a country of only eleven million people. In return for a bailout from the European Union and the International Monetary Fund, Prime Minister Giorgios Papandreou has announced various drastic cuts packages over the last few months. Workers have responded by holding one day national strikes, and even trying to storm 'their' parliament - but these actions have failed to stop any of the measures. Portugal and Spain are announcing similar cuts, whilst Romanian pensioners recently fought police, following a 15% cut in payouts, which takes many below the breadline.

Ordinary working people around the world are confronting disaster, as 'their' governments steal from the poor to give to the super rich. But if we have less money to spend, we'll be putting less back into the economy, which will inevitably bring a new, and deeper recession. We can then expect governments to repeat their trick when necessary, and announce yet more savage cuts. The global economy is on a downward spiral into another depression. Capitalism is eating itself.

But this present round of government spending cuts is bad enough, and it's set to be worse for people in Liverpool than in much of the UK. This is because the city's economy is significantly more dependent on public money than most, according to research by Stuart Wilks-Heeg from the University of Liverpool. In 2008, he found that 65% of the previous decade's new local jobs were in the public sector. And yet Liverpool's unemployment rate was over 10%, even in those boom years. Latest unemployment figures show 54,000 Liverpool city region residents claiming Jobseeker's Allowance, and many more need other benefits just to keep a roof over their heads. This might be the tip of the iceberg, because the government currently subsidises other areas of the local economy. It's clear that many Liverpool people face devastation in the near future.

If the picture I've painted seems bleak, there's not much I can do about that. Our situation is bleak. But this catastrophic crisis also brings an opportunity for reorganising society. We are used to safe and ritualistic ways of trying to make change - voting for MPs, marching from Point A to Point B, even going on official strikes (if the courts will let us). But surely it is now clear that these strategies achieve very little. Politicians generally only care about our views when they are after our votes. More than a million marched against the invasion of Iraq, but it happened anyway. And how many successful official strikes can you remember since the miners were defeated in the eighties?

It is time to recognise that the profit system works against the interests of all except the elites and their bought hangers-on. It causes vast poverty, despite having revolutionised technology, and therefore creating the tantalizing prospect of prosperity for all. It alienates people from each other and their work, where they spend a large chunk of their waking lives. It creates environmental destruction, because sustainability is a barrier to profitability. Perhaps worst of all, it threatens the survival of our species, as governments around the world respond to the crisis by becoming even more nationalistic.

The movements against cuts springing up around the world must bring people together, as they look for new ways to resist their oppression, and change things for the better. The only sane system would be one where the people who create wealth (be they builders, nurses, or parents bringing up their children) also control it, and run it in their own interests. Call that socialism, communism, or common sense, it doesn't particularly matter. The big question is this: how do we make it happen?